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Rockwell Collins Inc. reported financial results for third-quarter fiscal 2016 ended Jun 30, 2016. The company’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate of $1.59 by 2.5%. Reported earnings also improved 22.6% from $1.33 per share a year ago.
The company’s business segments registered robust growth across the board during the quarter, highlighted by a return to growth in Government Systems and 10% revenue growth in Information Management Services.
Revenues
In the fiscal third quarter, Rockwell Collins’ total sales were $1,334 million, missing the Zacks Consensus Estimate of $1,347 million by 1%. Revenues however improved 3.2% year over year due to higher sales across the segments.
Operational Highlights
Total segment operating income during the quarter was $282 million, up 3.7% from $272 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $244 million, up 0.8%. The figure represented 18.3% of quarterly sales versus 18.7% in the year-ago period.
Segment Performance
Commercial Systems: In the quarter under review, segmental sales of $612 million were up by a mere $1 million year over year primarily due lower sales of original equipment, which was partially offset by higher aftermarket sales.
Government Systems: The segment reported sales of $555 million, up 4.7% due to higher contributions from Avionics, partly offset by lower Communication and Navigation sales.
Information Management Services: Segment sales were $167 million, up from $152 million in the year-ago period on the back of aviation-related business growth.
Financial Condition
As of Jun 30, 2016, Rockwell Collins’ cash and cash equivalents were $307 million, compared with $252 million as of Sep 30, 2015.
Long-term debt (net) was $1,387 million, as of Jun 30, 2016, down from $1,680 million as of Sep 30, 2015.
Cash used for operating activities in the first nine months of fiscal 2016 was $223 million, compared with $341 million a year ago.
Fiscal 2016 Guidance
The company has narrowed its fiscal 2016 earnings outlook to the range of $5.50–$5.55 per share (versus $5.45–$5.65) on revenues of $5.3 billion (versus $5.3–$5.4 billion earlier).
Total segment operating margin is still projected at about 21%.
The company also revised its expectation of cash flow from operations to about $750 million from $750−$850 million projected earlier. The company continues to expect R&D investment of approximately $1 billion and capital expenditure of $200 million.
The full year tax rate has been revised to 22.5% from 22–23% expected earlier.
Upcoming Peer Releases
Raytheon Company is scheduled to release second-quarter earnings on Jul 28, 2016. The Zacks Consensus Estimate stands at $1.70.
L-3 Communications Holdings Inc. is scheduled to release second-quarter earnings on Jul 28, 2016. The Zacks Consensus Estimate stands at $1.68.
Spirit AeroSystems Holdings, Inc. (SPR - Free Report) is scheduled to release its second-quarter earnings on Aug 3, 2016. The Zacks Consensus Estimate stands at $1.05.
Zacks Rank
Rockwell Collins currently has a Zacks Rank #4 (Sell).
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Rockwell Collins (COL) Tops Q3 Earnings, Cuts FY16 View
Rockwell Collins Inc. reported financial results for third-quarter fiscal 2016 ended Jun 30, 2016. The company’s adjusted earnings per share of $1.63 surpassed the Zacks Consensus Estimate of $1.59 by 2.5%. Reported earnings also improved 22.6% from $1.33 per share a year ago.
The company’s business segments registered robust growth across the board during the quarter, highlighted by a return to growth in Government Systems and 10% revenue growth in Information Management Services.
Revenues
In the fiscal third quarter, Rockwell Collins’ total sales were $1,334 million, missing the Zacks Consensus Estimate of $1,347 million by 1%. Revenues however improved 3.2% year over year due to higher sales across the segments.
Operational Highlights
Total segment operating income during the quarter was $282 million, up 3.7% from $272 million in the year-ago quarter.
Rockwell Collins’ total research and development investment (including the increase in pre-production engineering costs) was $244 million, up 0.8%. The figure represented 18.3% of quarterly sales versus 18.7% in the year-ago period.
Segment Performance
Commercial Systems: In the quarter under review, segmental sales of $612 million were up by a mere $1 million year over year primarily due lower sales of original equipment, which was partially offset by higher aftermarket sales.
Government Systems: The segment reported sales of $555 million, up 4.7% due to higher contributions from Avionics, partly offset by lower Communication and Navigation sales.
Information Management Services: Segment sales were $167 million, up from $152 million in the year-ago period on the back of aviation-related business growth.
Financial Condition
As of Jun 30, 2016, Rockwell Collins’ cash and cash equivalents were $307 million, compared with $252 million as of Sep 30, 2015.
Long-term debt (net) was $1,387 million, as of Jun 30, 2016, down from $1,680 million as of Sep 30, 2015.
Cash used for operating activities in the first nine months of fiscal 2016 was $223 million, compared with $341 million a year ago.
Fiscal 2016 Guidance
The company has narrowed its fiscal 2016 earnings outlook to the range of $5.50–$5.55 per share (versus $5.45–$5.65) on revenues of $5.3 billion (versus $5.3–$5.4 billion earlier).
Total segment operating margin is still projected at about 21%.
The company also revised its expectation of cash flow from operations to about $750 million from $750−$850 million projected earlier. The company continues to expect R&D investment of approximately $1 billion and capital expenditure of $200 million.
The full year tax rate has been revised to 22.5% from 22–23% expected earlier.
Upcoming Peer Releases
Raytheon Company is scheduled to release second-quarter earnings on Jul 28, 2016. The Zacks Consensus Estimate stands at $1.70.
L-3 Communications Holdings Inc. is scheduled to release second-quarter earnings on Jul 28, 2016. The Zacks Consensus Estimate stands at $1.68.
Spirit AeroSystems Holdings, Inc. (SPR - Free Report) is scheduled to release its second-quarter earnings on Aug 3, 2016. The Zacks Consensus Estimate stands at $1.05.
Zacks Rank
Rockwell Collins currently has a Zacks Rank #4 (Sell).
ROCKWELL COLLIN Price, Consensus and EPS Surprise
ROCKWELL COLLIN Price, Consensus and EPS Surprise | ROCKWELL COLLIN Quote
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